Five banks were authorised in the 12 months to the end of March, similar to the average since 2006. Talks were held with another 25 potential applications.

The government wants to bolster competition on the high street, dominated by the big four banks – Lloyds Banking Group, Royal Bank of Scotland, HSBC and Barclays – by encouraging the creation of new banks. More than 30 banks have been authorised since 2006, although only a few would be regarded as competitors to the high street players, such as Metro Bank, which in 2010 was the first bank to open a branch network in 100 years, and buy-to-let lender Paragon, which has recently been handed a banking licence. After the period covered by the Bank of England report, Edinburgh-based bank Scoban was also authorised.

The Bank's data does not include TSB, the high street bank spun out of 24% taxpayer-owned bank Lloyds last year and floated on the stock market last month, because it already had a banking licence. Tesco Bank, which recently launched current accounts, was also already authorised.

The regulators were given a wider remit than just tackling competition on the high street and were instructed to look at ways of encouraging a range of new entrants, including in wholesale banking.

The report highlighted improvements in the process of authorisations, with 47 meetings before formal applications were made for a licence in the 12-month period compared with 48 meetings between 2010 and 2012. The Bank of England said that new banks seeking authorisation had a variety of business models in high street and wholesale banking or were aiming to offer loans to small businesses or retail customers taking in deposits.

Andrew Bailey, chief executive of the Bank's regulatory arm, the Prudential Regulation Authority, said the changes to regulation were making a difference. "Reducing barriers to entry can be achieved alongside continuing to ensure new banks meet basic standards that prevent risks to the safety and soundness of the UK financial system. The feedback we have received from the new banks has been very encouraging," he said.

City minister Andrea Leadsom said it was "great news for bank competition and choice" that the new banks were being authorised. "Critical to our long-term economic plan is getting new banks into the marketplace, and today's report shows we are doing that," said Leadsom.